The main argument from hospitals, on both this story and the previous story about the outrageous “chargemaster” prices compared to Medicare costs[2], is that “nobody pays full price.” Hospitals say their bills mean little, and that consumers are protected by government programs and insurance companies that negotiate lower prices than the full “retail” price listed on bills. Consumers who write us say that’s simply not true. The retail prices do seem to be at least a starting place for negotiations with some insurance companies, and so they higher those chargemaster prices go, the higher the bottom line for consumers seems to go.

And with insurance companies and employers demanding higher and higher deductibles from consumers before their health benefits actually kick in, the retail prices do affect the average person. Many employers are creating employee policies with deductibles at $5,000 a year or even more, turning a health care policy into little more than catastrophic backup plan.

One patient mentioned a physical therapy office in Boulder controlled by University of Colorado Hospital. Her bill shows the “charge” at $796 an hour (“not a week, not a day,” as she puts it)

for therapy that included manipulating her legs for a referred pain condition related to her spine. There was also brief application of an electronic muscle stimulant machine. Her insurance policy had negotiated a discount to $290 an hour, and that’s what she had to pay for each of five visits before the deductible was finally met. Nobody pays those prices?

The same patient found another therapist in Denver who charged $135 for the initial visit, and $85 for later visits, accepting the same insurance.

Another woman wrote us to say she’s been referred to a local hospital for a neurology consultation. “Money is tight,” she said, so she’s been trying to assess her costs ahead of time. Her ballpark quote for the physician’s fee was $509 to $770. “But I absolutely cannot get the hospital to give me a quote on what the facility fee might be, though I have been told one will be assessed for sure,” she wrote. “I have been bounced around to multiple offices at the hospital and left a voicemail for the billing office, all to no avail.”

The same patient says the calculation is complicated by the fact her insurance company cannot or will not tell her what discount they’ve negotiated for her share of the bill. “I know I probably won’t pay $509-$750″ of the doctor’s fee, “but will I pay 50 percent of that? 70%? 80%? No one can tell me. And what percent of the mysterious facility fee will I ultimately have to pay?”

Here’s the conclusion that should be chilling to anyone who really cares about medical outcomes, including the hospital and the doctors:

“I am ready to cancel the appointment, which is coming up in two weeks, because I feel like I’m going into it blind financially. Why can’t anyone tell me what this one appointment is going to cost me in the end?”

[1] about hospital “facility fees” layered on top of traditional prices for health services: http://www.denverpost.com/news/ci_23236112/facility-fees-inflate-hospital-prices-common-services

[2] on both this story and the previous story about the outrageous “chargemaster” prices compared to Medicare costs: http://www.denverpost.com/breakingnews/ci_23198935/some-hospitals-charge-vastly-more-same-care-including